After reaching investment and joint venture arrangements with Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, OKX is increasingly trying to position itself as a global fintech platform that covers cryptocurrencies, payments, and tokenized assets.
OKX secured new investments of $25 billion at a pre-money valuation from Circle, Ripple, Qube Research, and Technologies (including QRT), as well as from SC Ventures under Standard Chartered Bank, continuing to expand its business scope beyond cryptocurrency trading.
This financing was secured at a time when OKX and ICE plan to launch a 24-hour tradable tokenized U.S. stock market, which will use stablecoins for trading and settlement.
Macquarie expects that the early demand for this tokenized stock platform will be skewed towards retail investors, while regulatory uncertainties and integration costs may pose obstacles for institutional investors.
As the crypto exchange OKX receives a new round of investment, it is attempting to transform from a digital asset trading platform into a broader global fintech platform, with its business scope covering cryptocurrencies, payments, as well as traditional assets that are being migrated onto the blockchain.
New investors include Circle, Ripple, quantitative investment institutions Qube Research & Technologies ( QRT ), as well as the venture capital department SC Ventures under Standard Chartered Bank. OKX has not disclosed the amount of investment.
This round of financing is a continuation of the investment made by Intercontinental Exchange ( ICE ) in March this year. ICE is the parent company of the New York Stock Exchange ( NYSE ). Similar to previous transactions, the pre-investment valuation for this latest round of funding is $25 billion for OKX.
OKX Founder and CEO Star Xu stated: "The exchange is our starting point; we are evolving into a broader global fintech platform." The company aims to enable customers to hold, consume, invest in, and increase the value of their funds on the same platform.
This ambition highlights a broader shift among crypto exchanges. Companies that have built their businesses around cryptocurrency trading are increasingly attempting to become one-stop financial platforms, expanding their services to include payments, stablecoins, stocks, derivatives, and the tokenization of real-world assets.
Read more: Kraken's parent company, Payward, is betting billions of dollars to become a financial infrastructure, not just an encrypted exchange
The relationship between OKX and ICE indicates that this expansion is extending into traditional markets. A joint venture of OKX-ICE submitted an application this week, planning to launch tokenized stock trading under the framework of the U.S. Securities and Exchange Commission (SEC), pushing this exchange into a business area traditionally dominated by brokers and stock exchanges.
Whether this model can attract institutional investors remains an unknown.
In a report on Tuesday, Macquarie stated that the adoption will depend on whether OKX-ICE can attract enough companies, investors, and liquidity providers to maintain reliable prices around the clock. The temporary nature of the SEC exemption may also deter institutions from investing in integrating their systems into the platform until it is clear whether the rules will continue. Macquarie expressed similar concerns in its report on Monday as well.
Macquarie expects that the early adoption will be biased towards retail investors, as institutions are already able to efficiently access stocks listed in the US and face higher regulatory and technical barriers. However, the platform could still become another test for stablecoins as a settlement tool in regulated financial markets, rather than being limited to crypto transactions alone.
This overlap between cryptography and traditional finance is also reflected in the new investors chosen by OKX. Circle issues USDC, Ripple provides payment infrastructure and issues RLUSD stablecoins. According to the collateral arrangements between OKX and BlackRock, Standard Chartered Bank acts as the custodian for BlackRock's BUIDL tokenized government bond fund. QRT is the institutional counterparty for OKX, providing them with liquidity and trading capabilities.
